Property News

New Zealand Realtors Expected to Return to Trade Me

Trade Me Group will probably lure back real estate listings from its rival realestate.co.nz after backing down on a 10-month push to hike fees under a new structure, an analyst says.

Shares in New Zealand’s largest auction website have shed 24 per cent since October last year, lagging a nine per cent gain in the benchmark NZX 50 Index over the same period, when the company tried to boost revenue by shifting all real estate agents onto a fixed fee-per-listing structure from a capped monthly subscription plan.

Trade Me backed down on the plan on Wednesday following resistance from some agents, and will now offer either a lower fee per listing or a higher capped monthly plan.

“We think Trade Me’s revised fee structure is a necessary back-down in the face of strong agent opposition and will result in a recovery in listing volumes,” Stephen Ridgewell, an analyst at Craigs Investment Partners, said in a note.

“Agents reverting to the monthly subscription fee – which we think will be most agents – will be incentivised to place all their listings on Trade Me. This should lead to a recovery in Trade Me’s market share of listings.”

Trade Me’s share of listings has fallen to 84 per cent of the total listings of industry-owned competitor realestate.co.nz from 87 per cent in June, Mr Ridgewell said.

Still, an improvement in the volume of listings will likely be offset by a fall in average yield, leaving the brokerage’s overall forecasts for Trade Me’s property revenue relatively unchanged, he said.

Shares in Trade Me touched $3.36 in intraday trading on Thursday, their lowest level since April 2012.